Global recession

Is the financial crisis over, or should we expect another crash soon?

Listening to US officials over the past few days describe the national and global economies, people might be led to ask, "Crisis? What crisis?"

Ben Bernanke, the Federal Reserve chairman, said last week that "economic activity appears to be levelling out, both in the US and abroad."

Even though central bankers worldwide warn of obstacles to a full recovery, the dire predictions of a 10-year recession are like a distant nightmare.

Japan, France and Germany have declared themselves out of recession, and the US is close to doing the same.

Among the Western powers, only the UK is still in negative territory. The giants of the East, India and China, were shaken but never went into negative growth. Right now China has forecast a 10 per cent GDP growth this year.

Oil – the most important single factor in the world economy – is back above $70 per barrel, which many economists say is the optimal price. Too much above or below that, and the world economy stagnates.

And the financial sector, where the credit crisis began, has revived to the extent that bankers are paying themselves extravagant bonuses unabashedly.

On Monday, Riz Khan speaks with economist Peter Schiff, the president of Euro Pacific Capital, who predicted last year's crash in 2006, and Daniel Gross, one of the most widely read financial journalists in the US. He writes the Contrary Indicator column for the Newsweek magazine, and is the author of Pop! Why Bubbles Are Great for the Economy.